Teaching Case: Peanut Policy in the United States, 1996

Summary

The text of this case is a transcript of a story broadcast on NPR's All Things Considered on January 22, 1996. The story concerns Congressional debate about agricultural programs, particularly the price support program for peanuts. The story includes statements from a member of Congress as well as representatives of peanut growers and peanut processors. The peanut program includes import restrictions, a price floor and peanut growing licenses, and this case describes those and includes statements from peanut growers, processors and consumers.

Learning Goals

There are three main learning goals that this case addresses. First, it is a real world example of a number of policies students have learned about (price controls, import controls, licensing of participants in an industry) and provides an opportunity to apply analytical techniques (especially diagrams) to this issue. Second, it is a good exercise for defining the winners and losers from such programs and recognizing their concerns. Third, the rhetoric used by many of the participants is quite inflammatory and provides a nice opportunity to discuss how these devices are used in policy debate.

Context for Use

This case can be used in both principles and intermediate microeconomics courses as well as upper level courses in policy analysis or international trade. The case can be supplemented with other materials, including information on the overhaul in policy that happened in 2002 and the resulting lawsuit filed by peanut owners. These supplement are particularly useful for more advanced students.

Description and Teaching Materials

Teaching Notes and Tips

Assessment

This is material commonly covered in introductory and intermediate microeconomics courses. This case can be used in combination with lectures, problem sets and other means of teaching the material, and student learning can be assessed in the same way as it would be from those sources – through examinations and papers.